Westchester Mortgage Co. v. Thomas B. McIntire, Inc.

The complaint was dismissed at the opening of the trial, on the ground that it did not state facts sufficient to constitute a cause of action. The action against Foster is upon his guaranty of the payment of a promissory note. The complaint alleges the execution and delivery by the defendant company to plaintiff of its promissory note for $1,000, dated March 20, 1914, and payable at the Mt. Pleasant Bank, of Pleasantville, N. Y., in 60 days after its date, accompanied by a written guaranty executed by the respondent and the defendant Mclntire in the following language:

“This is to certify that the undersigned, for value received, hereby guarantees Westchester Mortgage Company against loss or damage by reason of the nonpayment of a note for one thousand ($1,000) dollars, dated on or about March 20, 1914, made by Thomas B. Mclntire, Incorporated, to Westchester Mortgage Company, payable 60 days after date, with interest, and the undersigned guarantees the payment of said note, and guarantees Jonathan Holden against suffering any loss or damage by reason of his guaranty or indorsement of said note, or by reason of the nonpayment of said note. It is hereby consented that the time for the payment of said note may be extended by one or more extensions, provided such time of payment is not extended to a time later than August 30, 1914, and it is consented that such extension be without notice to the undersigned.

“Dated March 20, 1914. Wm. H. Foster.

“Thomas B. Mclntire.”

It is alleged that in consideration of the guaranty, and relying thereon, the plaintiff indorsed said note for the accommodation and benefit of the maker, and for the purpose of enabling it to secure from the bank where it was made payable a loan for $1,000; that the Mt. Pleasant Bank discounted such note and paid to its maker, the defendant company, said sum of $1,000; that the defendants failed to pay said note at its maturity, and have never paid it; and that in May, 1914, said bank, for value, sold, assigned, and transferred to plaintiff all sums due and to become due thereon.

[1, 2] I am unable to see why this complaint does not state a good cause of action against the respondent as a guarantor. It is contended, however, by the respondent, that “the guaranty was against loss or damage by reason of the nonpayment of the note,” and “being one of collection, and not of payment, the complaint does not state facts sufficient to constitute a cause of action, in that there are no allegations therein showing that plaintiff has exhausted his remedy against the maker of said note.” The general rule of law stated has no application to the facts presented by the case at bar, for the reason that the guar

[3] The complaint sets forth the guaranty in full; the plaintiff is entitled to the benefit of its every feature and its full legal effect (section 534, Code Civil Procedure), and if susceptible of conflicting interpretations the one most favorable to the plaintiff must be adopted. Smith v. Molleson, 148 N. Y. 241 , 42 N. E. 669 ; Gamble v. Cuneo, 21 App. Div. 413 , 47 N. Y. Supp. 548 .

[4] The guaranty being for the payment of the note, it was not necessary to allege presentment, demand, protest, or notice, irrespective of whether the note was owned at maturity by the bank or by the plaintiff. Fidelity & Casualty Co. v. Wells, 49 App. Div. 171 , 62 N. Y. Supp. 1066 ; Allan v. Rightmere, 20 Johns. 365 , 11 Am. Dec. 288 ; Brown v. Curtiss, 2 N. Y. 225 .

The judgment must be reversed, and a new trial granted; costs to abide the event. The parties hereto having stipulated in open court that this case may be disposed of by a court of four, the decision is as follows:

Judgment reversed, and new trial granted; costs to abide the event. All concur.